American Economic Review: Vol. 89 No. 3 (June 1999)


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The Market for Evaluations

Article Citation

Avery, Christopher, Paul Resnick, and Richard Zeckhauser. 1999. "The Market for Evaluations." American Economic Review, 89(3): 564-584.

DOI: 10.1257/aer.89.3.564


Recent developments in computer networks have driven the cost of distributing information virtually to zero, creating extraordinary opportunities for sharing product evaluations. The authors present pricing and subsidy mechanisms that operate through a computerized market and induce the efficient provision of evaluations. The mechanisms overcome three major challenges: first, evaluations, which are public goods, are likely to be underprovided; second, an inefficient ordering of evaluators may arise; and third, the optimal quantity of evaluations depends on what is learned from the initial evaluations.

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Avery, Christopher (Harvard U)
Resnick, Paul (U MI)
Zeckhauser, Richard (Harvard U)

JEL Classifications

L15: Information and Product Quality; Standardization and Compatibility
D83: Search; Learning; Information and Knowledge; Communication; Belief
O33: Technological Change: Choices and Consequences; Diffusion Processes

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